Glossary · also called Project cost ledger, Job cost ledger, Cost register
What is a Project Cost Ledger in Construction?
Cost ledger: A project cost ledger is the running record of every cost on a construction project — material, labour, plant, subcontract and overheads — tagged to a cost head and phase. It separates committed cost, such as approved purchase orders, from actual cost incurred, so the project can be compared with its budget while work is still under way.
Definition
A company’s books record costs by account — purchases, wages, hire charges. A project cost ledger records the same costs by project, and within the project by cost head (material, labour, plant, subcontract, site overheads) and by phase or activity. That is what makes it possible to say whether one particular project is on budget.
A useful cost ledger tracks two kinds of cost:
- Committed cost — money you are obliged to spend but have not yet incurred, such as an approved purchase order or subcontract order.
- Actual cost — cost incurred: material received through a GRN, labour worked, plant used, subcontract work certified.
How it works
An example for one cost head, with illustrative numbers only:
| Cost head: Structural steel | Amount (₹) |
|---|---|
| Budget (from contract BOQ at cost) | 42,00,000 |
| Committed — open purchase orders | 9,50,000 |
| Actual — received to date | 30,80,000 |
| Committed + actual | 40,30,000 |
| Remaining budget | 1,70,000 |
| Progress on steel work | 70% |
At 70% progress the project has already committed or spent 96% of the steel budget. Looking only at actual cost (73%) would hide the problem. A cost overrun like this may point to a wastage issue, a rate that was wrong in the rate analysis, or extra scope that needs a change order.
Common mistakes
- Recording only actual cost, so overruns locked in by orders are invisible.
- Entering cost twice — once in purchase, again in a costing sheet. The costing sheet always falls behind.
- Posting at month end, too late to act.
- No link to progress, so spend cannot be compared with work done.
In Zaptiz
In Zaptiz Construction, the cost ledger posts committed and actual cost automatically from purchase orders, GRNs, approved labour muster, plant logs and subcontract bills. The budget is derived from the contract BOQ at cost, with variance by cost head and phase. See construction cost control software.